Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 8th March 1973.

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Photo of Mr Frank Judd Mr Frank Judd , Portsmouth West 12:00 am, 8th March 1973

The hon. Member for Wells (Mr. Boscawen) will, I hope, forgive me if I do not follow in detail his moderate argument, but time is short.

What I find difficult to accept about the Government's presentation of the Budget is the general atmosphere of self-congratulatory complacency, when there is no room at all for complacency about our economic situation. The Government's total failure to come to grips with the balance-of-payments crisis which has now developed was conspicuous and disturbing. Many experts are now agreed that the positive balance of payments situation which previously existed may be totally eroded by the end of the year, to the extent of a deficit of between £500 million and £1,000 million.

We should spell out to the country in this debate the hardship, the constraints and the difficulties which will inevitably follow should a crisis of that magnitude occur. The brakes will be applied again and hardship will fall on particularly the weakest members of the community. Yet nowhere in the remarks of Ministers or of hon. Members on the Government side has this point been recognised or the country made aware of the drift in the basic situation.

The other aspect which is disturbing in the presentation of the Budget is the emphasis that hon. Members opposite place on their self-evaluated sense of compassion. I believe that they are seriously misunderstanding the mood in the country if they believe that, even if it existed, compassion on their part would be an acceptable thesis for putting right the basic confrontations and antagonisms which are undermining our economic well-being. We have a very articulate and intelligent population, and that population at all levels is calling not for the compassion of the establishment but for justice in the management of economic affairs.

The hospital workers cannot be blamed for their attitude if, when they are being told that for their indispensable services the nation cannot afford more than a £2 increase, still bringing their basic rate up to less than £20, they are transfixed by the news that there is to be a £300 million tax handout to the wealthiest members of our society. That does not in their view add up to basic justice.

Similarly, when we are telling the gas workers that they must show restraint and moderation we cannot blame ordinary gas workers, who have shown a good deal of restraint over many years, if they take into account the fact that at the very time of their dispute the new head of the Pay Board is appointed with an income of £300 a week.

Even when we consider the Government's own employees, the Civil Service, there is something unconvincing about a situation in which the head of the Civil Service, presumably acting under instructions, writes to the ordinary rank and file civil servants, in the front line of Civil Service responsibility, doing the jobs we have legislated for them to do, dealing with the public, probably in the most difficult situations, and says that militant action is not warranted when many of them know that their total income is smaller than the size of his last increase.

Similarly, whatever the progress for pensioners that we have seen in this year's Budget, we must appreciate why the pensioners do not fall over themselves to express gratitude at the pittance offered to them when they contrast it with the vast profits still being made by the speculators.

I believe that this country has to have a prices and incomes policy, but if that policy is to produce results and be accepted it must be seen to be genuinely in the interests of the whole community.

I was very struck during the Christmas Recess when I visited a medium-sized firm in the neighbourhood of my constituency and discussed with the shop stewards the implications of the freeze. It is a firm with a good history of industrial relations with a story of considerate moderation in the way trade union leadership has acted. The shop stewards said to me "When we have a national crisis and have to forgo, as a result of the price freeze, an increase in pay that is due to us at the moment, how is it that £250,000 extra profit will accrue to the firm which would not otherwise have accrued? If this money was going to the nation, if it was being used in the interest of the community as a whole, it might make sense, but as it stands at the moment why should we accent this position?"

And they said something else. They said that in their own interest and in the interest of the firm and the country they had gone for package agreements in terms of their own remuneration over the years. But, they said, they would never again be able to commit themselves as union leaders to a package agreement phased over several years because of the present form of interventionism, which was totally unacceptable to their members. In future they would have to push for what they could get at the time of the negotiations.

As for the prices and incomes policy, we have first to relate it to the issue of the accountability of economic power and wealth because, unless we relate it to the issue of accountability and the control of economic power and wealth in society, a prices and incomes policy will never be acceptable to the ordinary rank-and-file worker and his leaders.

The other point we have to note in the context of all the pleas from the Government benches for the regeneration of the economy is that this will never be produced by economic techniques or theories. What is basically wrong in Britain is that society and industry are increasingly organised in such a way that ordinary people feel that they have no personal significance.

I ask myself this fundamental question. How can we in this House call for a responsible society, if, by the way in which society is organised, increasing numbers of people are constantly denied the opportunity of exercising any responsibility in their working and private lives? Until we accept this fundamental point of social structure, Budgets will be put forward in a very arid atmosphere which is unlikely to produce meaningful results.

Finally, I want to refer to one point in the Budget speech on which the Chancellor took a good deal of credit. I have the honour to be the vice-chairman of the National Council of Social Service and as such I am closely in touch with charities. It is not true to say that charities are satisfied with what the Chancellor said in his speech.

First, the Chancellor should note that the relief which he is now giving to the 42 charities he mentioned in his speech amounts to £76,000, of which £73,000 will go to only two of the charities in the list. Secondly, when he referred to the sample in the Binder, Hamlyn Report and stressed that of the selected 95 charities only 52 had responded, he seemed to put this in such a way as to infer that the others were not sufficiently concerned to bother to respond to the questionnaire. In fact, the reverse is the case since the whole question of VAT is so complicated that most of those which did not respond were unable to complete the questionnaire because they did not appreciate the problems and did not have sufficiently detailed records to be able to answer some of the questions.

Thirdly, the Chancellor said that with the changes which he was making 42 charities in the survey would have an overall gain next year. I suggest that it is not fair to look at the question in totals. Of the 42 charities, eight will benefit to the extent of £439,000, but the remaining 34 will have a loss of £280,000. Perhaps it was unfortunate that the sample included most of the largest charities in the country and those which had the kind of appeal that attracts large legacies. If another 42 charities were taken at random, nothing like eight would benefit from the changes instituted by the two Budgets. In his speech last year, the Chancellor said that If it can be demonstrated by particular charities that the effects on them of the various tax changes…would be to bring serious disadvantage, I should certainly be prepared to consider whether some means could be found of providing relief".—[OFFICIAL REPORT, 12th July 1972; Vol. 840, c. 1693.] It is arguable that, of the sample which he mentioned covering 42 charities, 34 will he at a disadvantage.